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Possible cancellation of decision on safeguard investigation on imports of certain oil derivatives may become a precedent

INTERFAX-UKRAINEKiev. April 7, 2011

Possible cancellation of the decision
of the Interdepartmental Commission on International Trade (Commission)
on initiation and conduct of safeguard investigation as regards imports
to Ukraine of certain oil derivatives by the District Administrative
Court of Kiev threatens to create a precedent. This is the common view
of lawyers polled by Interfax-Ukraine.
"If the court overturns the decision of the Commission, it will set a
precedent, which will allow foreign manufacturers, exporters and
importers of products to Ukraine to take advantage of it," says Associate with Volkov & Partners Law Firm, Andrii Zablotskyi.
Head of West Ukrainian Branch of Arzinger Law Firm, attorney Markian
Malskyy also admits chances a precedent to be set, however, adds that
challenging of the Commission’s decision cannot in any way mean that it
strips its power.
Lawyers agreed that it would be extremely difficult to challenge the
decision on initiation and conduct of the investigation. They explained
that it would be virtually impossible to prove that there were no formal
reasons for its initiation, in particular, due to the fact that the
decision contains many subjective components, as it was noted by M.
Malskyy.
Reportedly, the Association of Operators on the Ukrainian Market of
Petroleum Products has filed a lawsuit demanding cancellation of the
safeguard investigation that was launched by the Interdepartmental
Commission on International Trade concerning importation of certain
types of oil products. The court hearing will take place on April 7.
The safeguard investigation concerning import of certain oil derivatives
to Ukraine regardless of country of origin and export was initiated at
the end of January 2011. Notably, the Ministry of Energy and Coal
Industry of Ukraine called for introduction of import duties of EUR 80
per ton of diesel fuel and EUR 130 per ton of gasoline.
However, on March 14 the Minister of Energy and Coal Industry Yuriy
Boyko stated that Ukraine was not going to impose any duties on imports
of oil products.
Experts argue that import quotas may be introduced instead of taxes.
Ukrainian oil refineries numerously claimed that they buy oil products
at world prices, while the member countries of the Customs Union, in
particular, Belarus, which is the major exporter of oil to Ukraine, buy
crude oil which is not levied by taxes. Local plants are of the view
that imposition of taxes will allow to boost the volumes of oil refinery
and conduct modernization of production.
Major petrol filling stations that predominantly import oil products
criticized the possibility of import taxes imposition, as it may lead to
the market monopolization. In addition, the embassies of Lithuania,
Romania and Poland expressed their concerns on the situation in their
joint letter to the Prime-Minister of Ukraine.